The cost of my flood insurance policy has increased. I would like to increase my deductible to reduce the cost of flood insurance. Is this possible?
It may be possible. You would need to discuss this with your lender.
A lender should take into account the risk that an increased deductible would pose to the borrower and lender. Lenders should determine the reasonableness of the deductible on a case-by-case basis. It is not a sound business practice for a lender to allow a borrower to use the maximum deductible amount in every situation.
A lender should not allow the borrower to use a deductible amount equal to the insurable value of the property to avoid the mandatory purchase requirement for flood insurance.
Last Reviewed: October 2020
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